06/23/2016

Funerals can be very expensive here in Torrance. Many families pay $10,000 (and oftentimes more) for their loved one’s funeral. Hoping to relieve family members from the stress of this financial burden, the idea of paying for funeral expenses in advance using a prepaid funeral contract is growing in popularity. As with any financial decision, you should carefully consider the pros and cons of this investment.

Some of the benefits of prepaid funeral contracts are:

Your family does not have to deal with the emotional burden of planning your funeral.

Your family has financial help, and sometimes full payment, for your funeral costs.

Many times you can lock-in the cost of your funeral at today's price rather than a higher price in the future when the funeral is held.

You can often pay in installments.

Some of potential risks of prepaid funeral contracts include:

The funeral home could go out of business.

You may not be able to get a refund if you change your mind.

You may not be earning interest on the money you invest.

You could move or die away from home and your contract may not be transferable.

Before you sign on the bottom line, be sure to talk to a qualified will and estate attorney here in Torrance. There may be safer ways to set aside or invest money that will accomplish your goal of taking care of your final arrangements and decreasing the stress on your family. The bottom line is that it is critical to gather as much information as possible before tying up your money with a local funeral home.

If you’d like to talk to our Torrance will lawyers about taking care of your family so they don’t suffer financially at the time of your death, give us a call at (310) 782-6322.

06/16/2016

Many people believe that it would be easier for their loved ones if they transferred ownership of their home before they need to. Bypassing probate in Los Angeles County, they believe, will be easiest for everyone. That could be true. However, there are several risks to consider that might harm you or your heirs.

Hazard #1 – You could create tax problems

If you transfer your principle residence you could be disqualified from part or all of the capital gains tax exclusion causing an unnecessary tax liability. This means that if you decide to sell after sharing ownership of your home with your children, they would have to pay capital gains taxes on the increased value of the home. This is really bad news if you’ve lived in your home for many years and the value of the property has significantly increased.

Hazard #2 – Your loved one could get divorced

If you transfer an ownership interest of your home to your child, and then the child gets divorced, your ex-son/daughter-in-law might be entitled to part of the value.

Hazard #3 – Your child could file for bankruptcy

When you share ownership of a home with your child, you also share exposure to one another’s financial problems. If you are moving to an assisted living home and plan to use the equity in your home to pay the rent, you may have a bad surprise if the bankruptcy court demands some or all of the proceeds of the sale to pay your child’s creditors.

Hazard #4 – Something happens to your child

If something unexpected happens to your child and they become incapacitated or predecease you, you could run into real trouble. If, for example, your child becomes disabled and needs Medicaid coverage, he could be ineligible due to his share of the home.

Hazard #5 – Your child is a problem

After you transfer ownership of your home, you must all agree if you decide later to sell the home or even do renovations. If your child doesn’t agree with you, they can stop you. I know that it is hard to imagine your dear son or daughter in this light, but it happens more often than you can imagine.

The bottom line here is that you need to be very careful when considering transferring or sharing ownership of your home with your children. There are several other options but it is important that you work with a qualified estate planning and trust attorney in Los Angeles County who knows how to utilize better (and safer) legal strategies to accomplish your goals.

06/09/2016

Many of us are lucky enough to have our parents around long enough for them to know their grandchildren and great-grandchildren. If you are one of the blessed, consider yourself lucky. However, there is one thing that you may eventually have to face – a parent who should not live at home alone anymore.

As a Redondo Beach elder law attorney, I highly recommend that you talk to your parents while they are still healthy and active. If you haven’t, and an unforeseen circumstance is pushing you to confront the situation, it’s going to be rough. There’s no need to sugar-coat this fact. Even if the elderly parent is perfectly amiable, there may still be a strong emotional reaction from the parent that comes along with losing one’s independence. Hopefully, the guidance we are providing will ease that path.

If you don’t expect your parents to react well to the suggestion of moving out of their home, solicit help from others. If your parent has had an injury, let their doctor know that it would be very helpful if he or she brought up the touchy topic up during a visit. In some families, parents won’t hear you – perhaps because they still see you as their child – but they will listen to someone else. Even if you are both saying the same thing!

Then, there is the “m” word – if you don’t know your parents’ financial situation, now is the time to learn. Even if your parents are able to maintain control over their financial affairs now, there is a high probability that you will need to help, or even be forced to take things over in the very near future. Approach the topic with the idea of preparedness. Tell them you’ve been been learning a lot about estate planning and the next step it appears your family should take is to begin looking at mom and dad’s financial affairs so that if one becomes incapacitated, someone can step in and manage things until the parent regains their health. It is always helpful to paint this conversation in a supportive and positive light.

Finally, one of the very best ways you can help your parents get their affairs in order is to set a good example yourself! Why not go ahead and get your own will or trust taken care of? That way, your loved ones won’t be in financial chaos if something happens to you. The added bonus is that it gives you a platform for having “the talk” with your parents.

Nearly every day we get calls from adult children who are bringing in a parent that needs help getting their healthcare and financial documents in order. Believe me; it is much easier for everyone if we can work together before a medical crisis has occurred.

Set a good example! Give us a call today and we’ll schedule a consultation so that you can discuss your planning needs and concerns. All of our estate planning here in Redondo Beach is done on a flat-fee basis so there are no surprises.

06/02/2016

Hopefully you go to the doctor for a yearly physical. Getting a good checkup gives you a feeling of contentment knowing you are doing all you can do to keep yourself healthy. Have you considered a yearly estate planning checkup? Going through your documents and reassessing your decisions will give you peace of mind knowing you’ve done all you can do to keep your family secure if something happens to you.

An annual review doesn’t mean you have to read the legal documents front-to-back. Just go through the most important elements to make sure you would make the same decisions today. Here’s a checklist that will walk you through the process:

Major life changes

Have you had any life changes since you last updated your estate plan? Have you gotten married? Have you had a child? Have you recently moved from another state? All of these life changes may impact your estate planning which require your will or trust to be updated.

Consider your executor and/or trustee designations

Is the person you selected to be executor the person you would select today? If circumstances have changed and you now question whether this person is responsible and trustworthy you should consider updating your will or trust. Also, if you named one person, you may want to choose co-trustees who would work together. You may also want to set up additional levels in case your first choice of trustee is unable to execute.

Grandma’s wedding ring

Is there a particular family heirloom or other item or property that you want to go to a specific person? You might now want to update your will or trust to make sure that happens.

Financial power of attorney

Your financial power of attorney will act for you in a wide array of financial and business matters. It is essential that you think about the person you named and make sure that you still consider them the best choice for you.

Your health

Review your health care power of attorney to make sure that the person (or people) you named is someone you still trust to make major medical decisions for you. If your health care power of attorney lives in another city or state, you might want to consider naming someone local in case of an emergency.

Life insurance and retirement funds

While technically not a part of your estate plan, be sure to assess the choices you made as beneficiaries of your life insurance and retirement plans. Many people forget to update these after a divorce and you certainly don’t want your ex-spouse to inherit those funds.

This checklist should take you quickly through some of the most important parts of your estate plan here in Long Beach. If you need to update them, don’t delay. Procrastination is not your friend when it comes to estate planning!

05/26/2016

When clients come to see a Long Beach estate planning lawyer, they generally have multiple goals in mind. Interestingly, they don’t always realize this fact, thinking that they “just” need to put together a will that stipulates who gets what after they have passed away. While this is obviously a very important part of what estate planning lawyers do, it’s not a comprehensive view.

Yes, estate planning lawyers assist in the creation of wills, but let’s take a deeper look at what clients are really looking for. In the vast majority of cases, clients are concerned about three things:

Taxes

The taxes involved in estate planning are complex, and they don’t just come into play once an individual has passed. It’s possible that the estate tax (often called a “death tax”) is a pressing concern, but the lawyer will also be able to advise on issues such as income tax and gift taxes. Both of these taxes can have a huge impact on how much of the estate will actually end up going toward the death tax. For example, giving assets away during one’s lifetime can invoke a gift tax, but it can lessen the value of the final estate, meaning that the eventual death tax will require a smaller payout.

Long-Term Care and Medi-Cal / Medicaid

Every Long Beach estate planning lawyer knows the horror stories of individuals losing their entire life savings and more as a result of long-term care. Additionally, qualifying for Medi-Cal / Medicaid can require a pretty limited income and/or net worth for the individual in question. By working with an estate planning lawyer, the individual can develop strategies in advance for dealing with these potential difficulties later. From gifting assets to setting up trusts to purchasing long-term care insurance, there are many ways to reduce the impact of these types of expenses.

Family Strife

Many clients are worried that their family members will somehow interfere with their estate plans. Whether they fear someone will contest their wishes or that one or more family members will behave unscrupulously, estate planning lawyers in Long Beach are keenly aware that their concerns have merit. Again, there are strategies that the lawyer will recommend to lessen the potential for family members to create problems during the individual’s lifetime, as well as after his or her death. Certain provisions can be added to a trust, for example, that strongly discourage beneficiaries from bringing lawsuits against the estate.

Each of these concerns brings with it a variety of options and considerations, and a knowledgeable Long Beach estate planning lawyer will be able to work with a client to understand the choices available. Also important is the fact that everyone has their own concerns. One client may be more worried about family interference while another is anxious about taxes. It’s the estate planning lawyer’s job to uncover what a client’s goals and concerns are and to pursue a strategy that considers both.

05/19/2016

Here at The Law Offices of R. Christine Brown, APC, our entire legal team is passionate about helping parents name legal guardians for their children. It’s a critical step that allows parents to document the people they want and trust to raise their kids if they are incapacitated or unexpectedly pass away.

But, there is another area of planning for children that many parents overlook—and that deals with the issue of money and property. Who will be in charge of managing an inheritance, or keeping the child’s money safe from being lost or squandered if the parent(s) pass away?

In a lot of cases, estate planning for married couples is easy. You leave everything to your spouse. Then the surviving parent will take care of the children. But, what happens if something happens to both parents? Or if the parent is single? In many cases, the parents’ answer is that an inheritance simply “goes to the children” when they are gone.

Unfortunately, this answer is neither simple nor entirely possible, really. What vulnerable beneficiaries (minors or young adults) usually require is for someone else to be named to manage whatever they inherit because they are either too young (as in the case of a minor) or too immature to manage it themselves.

In some cases, parents will ask the people named as guardians to also be responsible for their children’s money and property – but not always. It is quite common for the responsibility for their welfare to be managed by a different person.

If this is the case and you don’t specifically name someone to manage finances for your children, the Hermosa Beach Probate Court will do it for you by appointing someone to serve as the children’s property guardian. In this case, the property guardian selected by the court has to report frequently and has limited authority to make decisions. And, the judge may choose someone that is a complete stranger to the family, or someone you would never choose. That is what’s at risk if a parent does not properly document their wishes in the event they unexpectedly pass away.

In the case of children who are 18 or older, it’s important to differentiate that they will have completecontrol of the property and money that you leave them. This may sound reassuring and less complicated than leaving property to minor children…but take a moment and think back. Were you in a position to make sound financial decisions when you were 18? Probably not. So, you should consider raising the age at which your child gains financial responsibility if you do not want to take the risk that your child’s inheritance will be mismanaged, lost, or squandered on things like fast cars, clothes, and lavish trips.

Utilizing a living trust is the best way to put “speed bumps” and “checks and balances” around your children’s inheritance so that they do not receive a lump sum of money outright before they are mature enough to handle it. Again, you will be able raise the age or lay out key milestones in which the child(ren) receive their money and specify a trustee who will again oversee the distribution of funds for your child(ren) according to your wishes for their future and how their inheritance is to be spent (i.e. on a college education, first house, wedding).

05/12/2016

If you are over 70 and ½ years old, you can donate some or all over your IRA to an eligible charity of your choice. Using a Qualified Charitable Distribution, you can donate directly from you IRA to the charity. Not only is this a great way to support your favorite charities, there are also some substantial tax benefits from making donations directly from your IRA.

Unlike traditional donations, you do not have to claim the donation as income, but this also means you cannot claim it as an itemized deduction. The IRS would consider that double-dipping. This can be used to help keep your income levels at a certain desirable range for when you file taxes.

If you take the standard deduction on your tax return, this can be a valuable benefit. Since you take the standard deduction, you do not receive any benefit from making a donation to a charity. However, since the money donated does not count as income, you will not be penalized. Basically, if you want to make a charitable donation and take a standard deduction on your federal tax return, it would benefit you to make the donation from your IRA, and not your other sources of income since you will have to pay taxes on the other sources of income.

Another benefit of making a charitable donation from an IRA is that it will count towards your required minimum distribution (RMD). Any distribution from your IRA would count as income on your tax return. If you do not need the money from your IRA for personal use, you could donate the RMD amount to an eligible charity and not have to report it as income. This may also help you avoid moving into a higher tax bracket.

If you have an IRA and are considering donating to a charity, give our Los Angeles County estate and charitable contribution lawyers a call at (310) 782-6322 so that we can help you carefully review the options and select the best course of action.

05/05/2016

It is an unfortunate fact of life that lawsuits are generally brought against those who have “deep pockets.” Litigators don’t want to go through the time and cost of a drawn-out trial if there is no money to be made; hence, large lawsuits are typically only filed against those individuals who have a significant amount of money out in the open. The following are five of the best strategies that Torrance asset protection lawyers use to shield their clients from lawsuits.

Create an Asset Protection TrustTorrance asset protection attorneys often advise their clients about creating an asset protection trust as a means to shield their assets from divorce, bankruptcy, the government, and litigation. Transferring ownership of your assets to an irrevocable trust can protect you from many of these dangers, however asset protection trusts may actually cause you to have less control over your assets. We suggest speaking with a Torrance asset protection attorney to determine whether an asset protection trust is viable in your situation.

Create an LLC or CorporationSmall business owners, landlords, and freelancers may often find themselves held personally liable if something goes wrong in their business. This is why Torrance asset protection lawyers suggest setting up an LLC or Corporation to shield personal assets from any legal attacks on your business. By having one of these structures in place, a person suing you may only attack assets held within the business and not any that are held personally by you.

Set High Limits on Liability InsuranceIf you are in line to receive an inheritance or windfall, you’ll want to consider increasing the limits on your personal liability insurance. Torrance asset protection lawyers typically advise that your liability insurance limit match the amount of your net-worth, but it’s important to discuss the matter with an asset protection attorney in order to accurately determine the state of your current financial situation.

Keep Your Assets Separate Torrance asset protection lawyers ask you to consider the fact that when you put money into a joint account, the other person (or persons) named on the account will often automatically have ownership over equal amounts of that money. In addition, when you pass away, the funds held in the joint account may be passed directly to that person(s) outside of your will or trust. Please consider these facts when placing large amounts of money into joint accounts, and consult with a Torrance asset protection lawyers if you have questions about the consequences of comingling accounts.

Plan EarlyIt is never too early to plan, but it is sometimes too late. This is especially true if you are being sued and you try to protect assets, as courts will often disallow transfers that reduce your financial liability during a financial crisis. Torrance asset protection lawyers also want you to keep in mind that in case you plan on applying for any type of government benefits, there are typically look back periods that may penalize asset protection transfers made within a certain timeframe.

If you have any questions about asset protection strategies, please contact us at (310) 782-6322 to set up a consultation.

04/29/2016

Following the shocking death of Prince, folks across the country were equally shocked to learn that the musical genius died without a Will or Trust in place to deal with the distribution of his fortune and valuable music catalogue when he passed away.

Dying without a Will in his home state of Minnesota now means that Prince’s wealth will likely be distributed among his six siblings… but only after more than half likely gets distributed to his other newfound family member, Uncle Sam. Yikes!

Obviously it wasn’t a lack of money stopping Prince from creating an estate plan to protect his assets and wishes if something happened to him. He had plenty of cash and access to high-powered lawyers in his own home state and across the country.

He bounced from advisor to advisor and professional to professional out of fear of being taken advantage of.

He didn’t want to subject himself to misguided information.

And, he feared becoming preyed upon by professionals with ulterior motives.

Before you write Prince off as crazy paranoid, believe it or not, this is exactly what stops average families from getting their affairs in order, too.

Maybe they don’t have millions of dollars in the bank and an impressive music catalogue like Prince did, but they hold on tightly (and rightfully, so) to the money and assets they do have… much of which they’ve worked hard for decades to acquire.

It’s only natural, then, that when faced with a crisis such as a medical illness, incapacity, the blending of a family, a divorce, a lawsuit, whatever, a general fear tends to rise up in folks that the attorneys they are meeting with to help them create a plan to protect their assets and families might be taking advantage of them or simply don’t have their best interest in mind.

Perhaps they have sticker shock at the basic cost of a Will or Trust. Or, they may feel like the attorney or advisor is just preying on them during a weak moment in their life.

In any of these scenarios, what ends up happening when someone has these feelings is that they freeze from the fear and end up doing NOTHING. Just like Prince.

As an estate planning attorney, I’m not going to say that these fears are unfounded. There are bad eggs in every bunch, including attorneys and financial advisors.

But the fallout of not protecting your family with a proper estate plan does not outweigh the risk and fear of being taken for a ride! If you want to be certain that everything you’ve worked so hard for actually goes to your loved ones, and not the government when you are gone, you’ve got to plan.

If you want to make sure your kids are raised by only the people YOU WANT if you unexpectedly pass away, you’ve got to plan.

If you desire to keep your life’s work safe from nursing homes, creditors, predators, lawsuits and divorce, YOU’VE GOT TO HAVE A PLAN.

You even need a plan to ensure your medical wishes are honored as you want. Here’s another area that Prince likely dropped the ball.

As a Jehovah’s Witness, he was opposed to any form of blood transfusion. But, did he have that legally documented? Because if he did not, and was incapacitated in the hospital for any length of time, his next-of-kin sister might have decided to go ahead with a transfusion. And it would have been perfectly legal, even though it was against everything he believed in.

I hope I’ve made it clear that you NEED to have an estate plan. Every adult does. It’s not an option.

And, the good news is that you can take proactive steps now to AVOID being taken advantage of or sold products or services that you really don’t need by an attorney or other type of financial advisor.

The key is to start your planning BEFORE a crisis strikes.

My best advice would be to start interviewing attorneys and local professionals while you are still healthy and have the mental capacity to make your wishes known. Your end-goal should be to compile a team of advisors that you know, like and trust to support you and your family during all of life’s transitions.

Don’t be afraid to compare services, compare costs (note: cheaper does NOT always mean better in this area) and even compare office procedures for each attorney. Ask tough questions like:

How do you bill? Is it hourly or on a flat fee basis? Will I get a bill for every phone call, email or fax to the office?

What happens if I call two years later with questions about my estate plan? How will you accommodate me?

How do you ensure that my plan continues to work as my life and the law changes through the years (if you don’t keep your documents updated, they won’t work!)

What happens if you close your office, or die? What happens to my file?

Will you coordinate the planning efforts we are embarking on with my other advisors so everyone is on the same page?

How do you handle updates to my plan in the future?

What happens if my goals or circumstances in my life change? What if I get sick or move into a nursing home? Are there trigger provisions that will allow us to deal with a crisis in my plan?

How will you support my family if/ when I pass away?

If you take the time to find a professional that can answer these questions to your satisfaction, that has as great reputation and is someone that you seem to “jive with” before there is a crisis in your life, you will feel much more confident and secure to lean on that professional during trying times that may arise in the future.

Sadly, Prince did not follow through in this area, but you can.

Begin to build your team of advisors, right now… at this stage of your life. It doesn’t matter how much money you have, whether you are young or old, if you have kids or not. Start to build your “A” team. Make it your goal to spare your family from the court costs, taxes, public scrutiny and fighting they would otherwise face if something happened to you.

Take your time to do “meet and greets” and interviews with area advisors. Go to every free workshop that is offered in your area to find that person that you connect with.

And, once you feel comfortable with your team, make the plan. Legally protect your assets, your family, and make your wishes known. Don’t ever let fear stop you from doing the right thing by your loved ones when you can start NOW to take concrete steps that mitigate any risk or loss of control.

You are worth it, and so is your family. Let this be the real legacy (beyond the music) that Prince leaves behind to you and your loved ones today.

04/27/2016

The costs of assisted living facilities continue to rise for seniors and their families, leaving them struggling to make sure their loved ones are receiving the care they need and deserve. While it seems like sometimes there is just no relief from these rising costs, Torrance elder law attorneys often advise their clients about tax deductions which may be available to them. Medical expenses (which include many long-term care expenses) that account for more than 10% of gross adjusted income for taxpayers under 65 and more than 7.5% of gross adjusted income for taxpayers 65 and older are deductible. However, there are many qualifications that must be met in order to receive these tax benefits.

When advising their clients, Torrance elder law attorneys list the following criteria that must be met in order for them to receive the tax deductions:

A care plan for personal care services must be put in place by a licensed health care provider such as a doctor, nurse, or social worker. While many assisted living facilities make care plans for their residents, do not assume this will always be the case.

The senior must be deemed “chronically ill” by a health care provider, meaning they either need to have a cognitive impairment such as dementia or need assistance with at least two of the activities of daily living: eating, bathing, toileting, continence, walking (transferring), and dressing.

However, even if these conditions are met, there are still some matters that need to be clarified in order to receive the full benefit of the assisted living tax deductions. For example, room and board are typically not allowed as tax deductions – unless the senior meets the above requirements and is in the assisted living facility primarily to receive medical care, as the room and board is then considered a medical expense. In addition, any medical costs reimbursed by an insurance policy cannot be used when calculating the deduction.

Torrance elder law attorneys advise that even if the seniors are in the assisted living facility for non-medical reasons, there are still some options for receiving tax deductions. Assisted living entrance fees are often counted as medical expenses for tax purposes, and assisted living facilities are required to outline the portion of their fees that are medical-related.

Adult children and family members that claim seniors as a dependent are sometimes eligible for assisted living tax deductions as well, once again as long as they meet certain criteria. The adult family members, either singularly or together, must contribute at least half of the senior dependent’s support for the year. If there are multiple family members supporting the senior, each contributing family member must pay more than 10% of the senior’s total support for the year and needs to sign a Multiple Support Declaration.

If you have questions about qualifying for the assisted living tax deduction, please contact our office at (310) 782-6322 to see how we may help you.